Phone cards offer cheaper calls but watch restrictions

Related Stories

Using prepaid calling card may help consumers save money, but they need to pay attention to what they'rebuying, the Competition Bureau advises.

The phone cards work on the same principle as the internet-based VoIP phone systems.

The local number printed on the card gives callers access to a computer, where voices are transmitted over the net to another computer in the country being called. The call is then converted back to a local call.

Since not all phone cards are created equal, people should check the fine print, says Don Mercer of the Competition Bureau of Canada.

For example, a card may claim a consumer gets 12 minutes of talk time, but when maintenance fees, rounding up of minutes and taxes are included, then the card may only allow about nine minutes for talking.

"What happens is that you're not getting that rate per minute," said Mercer. "What you're getting is that rate plus a whole lot of add-on charges."

The bureau estimates that more than 300,000 Canadians have fallen victim to weekly expiration dates, restrictions and a lack of guarantees on what countries can be called. In 2004, the competition bureau fined one company, Gold Line, $750,000 for deceptive advertising.

The bureau recommends that consumers double-check any phone cards for fine print, either on the back of the card itself or on posters advertising the cards in stores.

If consumers have any questions they should ask a cashier. If something seems suspicious, report it immediately to the Competition Bureau.

In general, though, legitimate phone cards are a good way of reducing long-distance bills.

Jason Morton of Winnipeg uses the cards to keep in touch with his girlfriend, who has been working in Ghana for the last six months.

"If I speak to her for 20 minutes, it will cost $20, just about," said Morton. In comparison, he uses a $5 phone card to talk to her for an hour.